The new regulation would hit small and micro producers the hardest, Source: Bill Mead / Unsplash

Hungarian policy puts the breaks on solar power expansion

Hungarian policy puts the breaks on solar power expansion

Many solar farmers would also need to invest in battery capacities, which raises the barrier to entry into the micro-production renewable market

Last week, the Hungarian government made a decision to suspend the grid feed-in of energy generated from future solar installations. According to a statement by the Hungarian Solar Panel Association (MNNSZ), this single move has destabilised the solar industry in the country, causing massive uncertainty for solar system producers, retailers and consumers.

This is because the new regulation would ban new installations from being able to resell excess energy back to the Hungarian grid for an indefinite amount of time, according to a statement by Gergely Gulyás, the Minister of the Prime Minister’s Office.

Batteries would make PV systems much less affordable

This is a curtail trade scheme popular throughout the European Union and one of the pillars holding up the solar expansion. This is because solar farmers, especially small and micro producers, could use the revenue from selling extra energy to pay off their investments relatively quickly.

According to the Hungarian Solar Panel Association, private individuals need between six and eight years to pay off the investment, while small companies with more space for photovoltaics (PV) need around one to two years. However, the new regulation banning PV systems from the grid could put a stop to renewable expansion in Hungary in general.

Here is what has changed: until last week the system operated on a balance settlement basis, meaning that the difference in the energy produced by a solar system and consumed by a household had to be settled. If consumers used more, they would have to pay the energy provider, if they consumed less - the provider paid them.

With the new regulations, solar energy producers would not have the option to sell their energy back to the grid. Instead, they can use it during the day and at night, during peak consumption, that energy would be lost, unless producers install expensive batteries.

However, as the Hungarian Solar Panel Association explained in a press statement, this would come with a significant cost implication.



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